Calcutta High Court
Arijit Chakraborty vs I.T.O. Ward 46(1) on 1 April, 2019
Author: I.P. Mukerji
Bench: I.P. Mukerji, Md. Nizamuddin
O-8
GA No.2222 of 2016
ITAT No.300 of 2016
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
ARIJIT CHAKRABORTY
Versus
I.T.O. WARD 46(1), KOLKATA
BEFORE:
The Hon'ble JUSTICE I.P. MUKERJI
And The Hon'ble JUSTICE MD. NIZAMUDDIN Date : April 1, 2019.
Appearance Mr. Avratosh Majumdar, Ld. Addl. A.G. Mr. Avra Mazumdar, Adv.
Mr. Anirban Mitra, Adv.
Mr. P.K. Drolia, Adv.
The Court : This is a valuation dispute. The provision involved is Section 50C of the Income Tax Act, 1961.
According to the assessee, the valuation of the property by the departmental officers as confirmed by the Tribunal under the said Section 50C(2) is perverse. The suggested question on which this appeal should be heard out under Section 260A of the said Act is set out in paragraph 16 of the stay petition as under:
"Whether in the facts and circumstances of the case, the valuation made by the DVO under Section 50C(2) regarding the sale price of the property suffers from material irregularity and if so whether the finding arrived at by the tribunal confirming such valuation is perverse?"
We have gone through the impugned order of the Tribunal dated 13th April, 2016. We cannot say for a moment that it is perverse. But, nonetheless, we find that the departmental Valuer on which the Tribunal relied upon did not adopt a proper approach in making valuation of the subject property. The appellant's case is that the property was under the occupation of or the property was being used by the members of a certain 2 political party who were preventing its beneficial use by the owner. To rid the assessee of this problem, he had to sell it at the declared price of about Rs.30 lakhs.
The case of the Revenue is that its valuation was about Rs.72 lakhs and odd at the time of sale.
The question to be answered is : whether this was the "fair market value" of the property at the time of sale?
The issue ultimately boils down to whether a prudent seller dealing at arms length with a prudent buyer in ordinary market conditions, in relation to a property similarly situated in the same area, would have got, about Rs.30 lakhs only by its sale or a much higher price determined to be Rs.72 lakhs or so by the valuation officer.
We are of the opinion that more evidence is to be produced and considered for coming to the conclusion.
For this reason, we set aside that part of the order of the learned Tribunal dealing with the valuation under Section 50C and the matter back to it to consider the valuation aspect in accordance with law by a reasoned order within one year from the date of communication of this order.
It will be open to the Tribunal to refer the matter to the departmental Valuation Officer for a fresh valuation upon considering the evidence adduced by the parties.
This appeal (ITAT No. 300 of 2016) along with the stay application (GA No.2222 of 2016) are disposed of by this judgment and order.
(I.P. MUKERJI, J.) (MD. NIZAMUDDIN, J.) cs.